The US intelligence operations have been dealt another serious blow with the failed launch of a key eavesdropping satellite. The explosion of an air force rocket during lift-off last week has made a US$1 billion (HK$7.7 billion) hole in the Pentagon budget and has hurt Washington's capability to spy on key targets. China, Russia, Iraq and the India and Pakistan border were among the potential sites to be monitored by state-of-the art communications intercepts aboard the aborted satellite, codenamed Vortex. The satellite, which would have been under the control of the top-secret National Reconnaissance Office, was considered a vital component in improving the Pentagon and the CIA's ability to intercept information on target countries' military movements and missile deployments. The failed launch is another blow to the US intelligence establishment, which suffered great embarrassment when it failed to predict India's nuclear tests last spring. The next satellite launch, which uses a similar kind of Titan rocket made by Lockheed Martin, was due to take place in December, but is now likely to be delayed while engineers investigate what caused last week's vehicle to veer out of control and catch fire. 'This is a sad day for the United States Air Force,' Cape Canaveral launch site commander Brigadier-General Randall Starbuck said. Although the incident was only the second launch failure of 24 Titan rocket launchings - considered a good record - it is still an expensive failure. The rocket cost about US$400 million and the satellite an estimated US$800 million. Military personnel immediately ushered the press away from the scene of the crash and ordered the US Coast Guard to seal off the ocean area containing the debris of highly classified technology. Radio warnings were issued, ordering nearby craft to stay away. John Pike, a security expert at the Federation of American Scientists, said the accident would put back plans for upgrading the spy satellite network. 'Everybody's collection and exploitation plans for next year assumed this satellite was going to be operating by the end of the fiscal year,' he said. 'Well that's not going to happen.'